Twitter is building a media business using other people’s content

As Twitter continues to build out new features such as “expanded tweets” and curation-based services like its NASCAR editorial offering, it has become pretty obvious where the company is headed: it has given up on being a utility built on open APIs and is becoming a media company, powered by a rapidly-growing advertising platform. Twitter also has one big advantage that other media companies don’t: the fact that it doesn’t have to produce any of the content, but simply acts as a filter for information from other sources. Its success will be determined by how well it strikes a balance between helping other media entities and competing with them.

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Twitter CEO Dick Costolo has repeatedly resisted suggestions that Twitter is a media entity, perhaps in part because the company wants to be seen as a partner for traditional media companies like newspapers and TV networks. But as its advertising business grows larger — thanks in part to reports from advertisers of “staggering” levels of engagement with ad features like promoted tweets — and it continues to tighten the rules on its API to squeeze out third-party developers, it becomes more and more clear that Twitter’s future is based on controlling access to the information flowing through the network as closely as possible.

Twitter’s future lies in capturing more user attention

The “expanded tweets” feature, which is currently being used by a number of media companies such as the New York Times (and GigaOM), is a glimpse of what this future looks like: if a tweet contains a link to an article or webpage that uses special tags, users can expand the tweet to show an excerpt of the original — or a video or photo or other content — inside the Twitter app or in a tab on Twitter.com. In an interview this week with the Los Angeles Times about the company’s plans, Costolo said something interesting about how Twitter sees its role. According to the newspaper, he said:

Twitter is heading in a direction where its 140-character messages are not so much the main attraction but rather the caption to other forms of content.

So instead of being a simple information utility that distributes 140-character messages, many of which contain links to other kinds of content, Twitter wants to become something more like a destination. Instead of sending people who click those links away to other websites and media outlets, the company wants to hang onto users for a little longer by showing them excerpts of that content inside its own frame — and it wants to do this primarily so that it can capture more of their attention, since that’s what advertising-based media players do. But then who ultimately gets to retain the value of that attention, Twitter or its media partners?

As I’ve argued before, this isn’t all that different from what the New York Times and other traditional media outlets are trying to do: namely, to walk the tightrope between pushing people away by giving them links to content elsewhere, and trying to hold onto them long enough to show them ads. Even Google is struggling with this dilemma — the company used to be known for the speed with which it sent users elsewhere, but over the past few years it has been spending more and more time trying to capture the attention of users and hold onto them for longer with services like Google+ and its Search Plus Your World feature. Facebook is also trying to be a partner for media companies, but to some extent is a competitor for attention and ad dollars as well.

Send users away, or try to keep them inside your app?

In a recent interview with Om as part of paidContent 2012 in New York, Betaworks CEO John Borthwick made a good point about the tension between pushing people away and holding them in. As he put it:

The grain of Twitter moves with the grain of the web; it’s similar to Google in that it’s a discovery platform that pushes you out. Now they’ve said “We’re going to be a media company” — but the grain of that moves in the opposite direction, to try and keep people in one place, to almost create a walled garden.

The big challenge for Twitter, then, is to somehow manage that transition properly. How does it capture — and to some extent control — more and more content from outside sources, so that it can hang onto users for longer and show them ads, without irritating the media companies and other entities that it relies on for that content? This is why critics such as blogging pioneer Dave Winer argue that Twitter is more of a competitor for media companies than a partner, because it is trying to do fundamentally the same thing that media outlets are trying to do, and it is doing so by using content that belongs to others.

This isn’t all that different from what services like Flipboard and Zite do: they also take content from other sources and aggregate and filter it, and they also walk a fine line by showing excerpts of an original source, or in some cases showing the whole thing inside their own frame (something Zite was threatened with a lawsuit over early in its career, before it was acquired by CNN). Some media companies are seeing the companies as partners — as the New York Timeshas with Flipboard and the Wall Street Journal has with Pulse — but they could also be seen as competitors in many ways.

Is Twitter a friend and helper to media companies, or a growing rival for both attention and ad dollars? Is it more focused on sending users away or on keeping them inside its walled garden? Those are the questions that anyone interested in Twitter’s future — either as a service or as a business — needs to think about.

Twitter is doing the same thing to news as Amazon did with books. Their using it as a “loss-leader” in a sense, except it isn’t costing them anything (which is the fault of the publishers.

Twitter is betting the future of media+mobile is in streams (duh). I think Twitter will turn “Cards” into an API platform in which developers can build rich gaming, video, and even commerce applications into.

They are using “news” as the core stream, but bundling in all sorts of other media experiences.

So Cards becomes their developer platform.

Soon, as a developer, I’ll be able to write apps into the stream and into the network.

i’m incredibly impressed by how well timed twitter’s transitions have been. took a while from brand’s to move away from just general customer service to being comfortable on the platform as a content provider and engagement resource. User’s have established habits with when/where/how they are accessing twitter’s info and user’s also have a general understand now of what creates the best and most viral content making it a treasure trove of stimulation and insight.

Here’s the thing; Twitter functions best as a notification channel. If it’s my default notification channel it doesn’t matter if I go off-site to consume various content because I’m always going to come back to my default channel to source the content I want to consume. In that sense “time-on-site” is completely irrelevant.

When and if Twitter starts to enable filtering within individual accounts, usage and utility will skyrocket. This is the essence of the issue of Interest Graph vs Social Graph and the reason that within the next year or two Twitter has a good chance of eclipsing Facebook in market value.

Judy Shapiro said it best: “Commerce happens in communities of interest, not social networks”.

Twitter is well on its way to being a media ‘platform’, not just a message bus for all of us. In-tweet rich media, perhaps embedded media/video players on its home screen, and even games in addition to information will be published and consumed on this platform. Not sure if that goes against any ‘grain’ – seems a pretty linear evolution unless it was to be strictly an information-utility.

I never thought of Twitter as a giant filter until reading this article. Very interesting. I have noticed more and more advertisements and “promoted” Tweets in my Timeline, I support a little bit but how much self-promotion and Twitter-promotion is too much before it becomes rather meaningless, or virtually impossible to get your desired audiences attention.

Mathew, Good piece. I do think it is a shame that Twitter seems to be moving further and further away from being an API-driven communications platform and more and more towards being just another media company offering a place for people to exchange messages. There are hundreds of those out there already, and if Twitter continues down this path they will become simply yet-another-walled-garden rather than a truly interesting method of communication. It will be too bad if Twitter goes that way… and all the signs do point in that direction. – Dan

I agree, Dan. I think Twitter is really trying hard to balance being both of those things at once, but unfortunately it may be impossible to do both at the same time — and one of those roles seems to have a lot more money associated with it than the other.